Earthlink 2009 Annual Report Download - page 85

Download and view the complete annual report

Please find page 85 of the 2009 Earthlink annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 175

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137
  • 138
  • 139
  • 140
  • 141
  • 142
  • 143
  • 144
  • 145
  • 146
  • 147
  • 148
  • 149
  • 150
  • 151
  • 152
  • 153
  • 154
  • 155
  • 156
  • 157
  • 158
  • 159
  • 160
  • 161
  • 162
  • 163
  • 164
  • 165
  • 166
  • 167
  • 168
  • 169
  • 170
  • 171
  • 172
  • 173
  • 174
  • 175

Table of Contents
EARTHLINK, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The following table summarizes activity for the liability balances associated with the 2007 Plan for the years ended December 31, 2007,
2008 and 2009, including changes during the years attributable to costs incurred and charged to expense and costs paid or otherwise settled:
Facility exit and restructuring liabilities due within one year of the balance sheet date are classified as other accrued liabilities and facility
exit and restructuring liabilities due after one year are classified as other long-
term liabilities in the Consolidated Balance Sheets. Of the unpaid
balance as of December 31, 2008 and 2009, approximately $5.9 million and $5.1 million, respectively, was classified as other accrued liabilities
and approximately $10.8 million and $12.3 million, respectively, was classified as other long-term liabilities.
Legacy Restructuring Plans
During the years ended December 31, 2003, 2004 and 2005, EarthLink executed a series of plans to restructure and streamline its contact
center operations and outsource certain internal functions (collectively referred to as "Legacy Plans"). The Legacy Plans included facility exit
costs, personnel-
related costs and asset disposals. EarthLink periodically evaluates and adjusts its estimates for facility exit and restructuring
costs based on currently-
available information. Such adjustments are included as facility exit and restructuring costs in the Consolidated
Statements of Operations. During the year ended December 31 2007, EarthLink recorded $1.1 million of facility exit and restructuring costs
related to Legacy Plans as a result of changes in estimates. During the years ended December 31, 2008 and 2009, EarthLink recorded reductions
of $0.3 million and $0.1 million, respectively, to facility exit and restructuring costs as a result of changes in estimates. As of December 31,
2009, the Company had a $0.5 million liability remaining for real estate commitments related to Legacy Plans which was classified as other
accrued liabilities in the Consolidated Balance Sheet. All other costs have been paid.
4. Discontinued Operations
In November 2007, management concluded that its municipal wireless broadband operations were no longer consistent with the Company's
strategic direction and the Company's Board of Directors authorized management to pursue the divestiture of the Company's municipal wireless
broadband assets. As a result
81
Severance
and Benefits
Facilities
Asset
Impairments
Other
Costs
Total
(in thousands)
Balance as of December 31, 2006
$
—
$
—
$
—
$
—
$
—
Accruals
30,303
12,216
20,621
1,131
64,271
Payments
(18,262
)
(480
)
—
(
760
)
(19,502
)
Non
-
cash charges
—
4,388
(20,621
)
(371
)
(16,604
)
Balance as of December 31, 2007
12,041
16,124
—
—
28,165
Accruals
461
4,808
4,125
—
9,394
Payments
(12,502
)
(6,174
)
—
—
(
18,676
)
Non
-
cash charges
—
1,936
(4,125
)
—
(
2,189
)
Balance as of December 31, 2008
—
16,694
—
—
16,694
Accruals
—
5,697
46
—
5,743
Payments
—
(
5,442
)
—
—
(
5,442
)
Non
-
cash charges
—
489
(46
)
—
443
Balance as of December 31, 2009
$
—
$
17,438
$
—
$
—
$
17,438